Special session starts with government shutdown looming

Speaker of the House Mike Hubbard gavels in the special session of the Alabama Legislature at the Alabama Statehouse in Montgomery, Ala. on Tuesday September 8, 2015.(Photo: Mickey Welsh / Advertiser)Buy Photo

With just three weeks before a shutdown of state government, Alabama legislators Tuesday said they felt a new urgency to address a General Fund shortfall.

But it was clear that plenty of give-and-take remained as lawmakers began a special session focused on fixing the budget.

Gov. Robert Bentley’s latest revenue proposals, which would bring in an extra $260 million to the troubled General Fund, are unlikely to all achieve passage, legislative leaders said. But they did expect some new revenue to make it through -- as well as cuts to state agencies.

“We’re down to the wire now,” Senate President Pro Tem Del Marsh, R-Anniston, said Tuesday. “Everybody understands you’ve got to have a budget.”

Finding a budget that can pass has been tricky. Both Bentley and House Speaker Mike Hubbard, R-Auburn, spoke with the Legislative Black Caucus Tuesday in the hopes of getting them to back a revenue proposal.

Republicans generally have the votes to pass bills without Democratic help, but divisions over revenue proposals have appeared in both the House and Senate GOP caucuses. Democrats say they will not vote for new taxes without a lottery or Medicaid expansion, which they say will improve public health and bring new revenues and jobs into the state.

Rep. Napoleon Bracy, D-Prichard, the chairman of the Alabama Legislative Black Caucus, said Bentley and Hubbard asked them to consider supporting provider and tobacco taxes, among other items. Bracy said the caucus would mull them over, but “right now, our answer is no.”

“We’re interested in Medicaid expansion,” he said. “That has been our position for a long time.”

Medicaid expansion would allow anyone making 138 percent of the poverty line -- $16,243 a year for an individual; $33,465 for a household of four -- to claim benefits. Alabama Republicans have argued the state does not have the resources to match the federal expansion of Medicaid eligibility. The federal government pays 100 percent of the cost of expansion through 2016. After that, the percentage paid by the government falls, stopping at 90 percent in 2020.

“If we do have any expansion, or if there’s any talk of that, that comes at a price,” Hubbard said. “We have to fund those matching funds by 2020, when it’s 10 percent. I have no idea how we would come up with that, and it would be irresponsible for us as a body to do something and have no idea how do it.”

Jennifer Ardis, a spokeswoman for Bentley, declined to discuss the specifics of the governor’s discussions with the Black Caucus Tuesday, but said he has met with legislators to avoid a shutdown and “to bring about real change in the way we fund state government moving forward.”

The General Fund faces a shortfall of at least $200 million in the 2016 fiscal year, which starts Oct. 1. Flat growth in its three dozen revenue sources and rising costs, particularly in Medicaid and Corrections, plague the budget. Medicaid has seen eligibility grow amid the poverty in the state; the prison overcrowding crisis, which has contributed to rising violence in state’s correctional facilities, has fueled cost growth.

Legislators have been unwilling or unable to raise new revenues to address the shortfall. Gov. Robert Bentley and House Republican leadership have pushed new revenue packages in the previous two sessions, but both fell apart in the face of Senate opposition and some pushback in the House Republican caucus. Senate leadership proposed lottery and gambling as a possible way to fill the hole, but Senate Republicans divided over it.

Lottery bills were filed Tuesday evening. However, Marsh said he believed gambling would likely have to wait for next year’s regular session, which starts in February.

Bentley said last week he would submit a budget with cuts of up to five percent to some state agencies. The governor said his goal is to protect major state agencies -- such as Medicaid, Corrections, Mental Health and Human Resources. Marsh said Tuesday legislative leaders shared the same goals.

“It gives an increase in Medicaid to continue programs of cost savings and funds the prison (reform) legislation that was passed,” he said. “And it level-funds the courts.”

The revenue proposals under discussion include an increase in the tax paid by nursing homes to support Medicaid; a repeal of a FICA deduction on individual income taxes and a 25 cent increase in the tobacco tax. Marsh indicated a shift of both use tax revenues and obligations from the state’s education budget to the General Fund would also be likely.

Marsh said legislators were looking at a revenue range between $140 million and $200 million. Hubbard did not commit to a specific number, saying it would depend on what survived the legislative process.

“We do know from a budget standpoint what chairman (Steve) Clouse (R-Ozark) and his committee have been working on,” Hubbard said. “But really, it’s got to be a function of the (revenue) bills that come through the House, and basing a budget based on that.”

Shepherding those bills through has proven difficult. Hubbard said his visit with the Black Caucus was not a sign of concern about votes in the House Republican Caucus.

“I think with the Republican caucus we would have the votes,” he said. “But we want to make it a bipartisan situation. It’s not just our constituents that depend on state government. It’s the Democrats’ constituents.”

Bracy said they were looking for a “long-term” solution to the General Fund budget. Some Democrats have also complained that Republicans left them out of the loop on the major budget discussions.

“If you don’t call me to the party beforehand, don’t call us to come to the after-party,” said Rep. John Rogers, D-Birmingham.